I'd like to thank everyone who read and commented on my first diary. It's a pleasure to be able to interact with such a vibrant online community and I hope to continue that while I campaign for the House seat in CA's 32nd congressional district. You can visit my campaign site at PleitezforCongress.com.
As I write this post, we are on the verge of passing the stimulus package, which now totals to about $789 billion — $719 billion, if you don't include the AMT provision — and it's a relief to see that the Republican posturing about fiscal responsibility won't stop this badly needed funding. The rate and size of these job losses are unseen in my lifetime, and any policy that stems these losses must come soon.
However, negotiations in the conference committee have not restored the state aid to its previous levels.
From the New York Times:
Despite intense lobbying by governors, the final deal slashed $35 billion from a proposed state fiscal stabilization fund, eliminated $16 billion in aid for school construction and sharply curtailed health care subsidies for the unemployed.
This provision has been in limbo ever since the bill left the House, going from $79 billion to $39 billion when the Collins-Nelson amendment was introduced (the final bill looks to split the difference at $54 billion). The fact that most of the state fiscal stabilization cuts have remained in the final bill will have far reaching consequences. As Krugman and others have pointed out, these would have had the most immediate stimulative effect on the economy, and cuts to this provision not only weaken our chances for economic recovery, but endanger state services already threatened by declining tax revenue.
We currently have 46 states running budget deficits, but it is California's mammoth $42 billion hole that looms over the rest, with the crisis already showing itself through cuts in state services. While California's budgeting process is always a point of high drama within this state, this year you really cannot underestimate the damage wrought by the recession and tax revenues losses. The effects of this crisis have become impossible to ignore:
The Wall Street Journal:
After-school programs in low-income areas are being scuttled, putting high-risk teens on the street just as police forces are being cut. Schools are closing classrooms, and some highway projects have ground to a halt. The state may not be able to monitor some sex offenders as required under law.
The Sacramento Bee:
Leona Heydenryk, 92, is already imagining how she will manage, hauling one grocery bag out of her car, pushing it to her home on her rolling walker and then inhaling from her oxygen tank before going back for the second bag. If the budget cuts that Gov. Arnold Schwarzenegger has proposed go through, the Grass Valley senior will have to make other contingency plans. Social workers say she will score too well on a "functional index" to merit the part-time services of Consuelo Lopez, who helps her shop, clean house, do laundry and prepare meals to keep on hand.
The San Jose Mercury News:
When California legislators finally finish wrestling with a $40 billion budget deficit, residents of all sorts will feel the pinch — school children and municipal workers, the developmentally disabled and unemployed parents. But expected cuts to assistance for the blind, aged and disabled are deemed by poverty-watchers as among the most devastating, given the inability of those clients to, say, take on a second job to fill the gap.
The San Francisco Chronicle:
California's budget woes will sweep over the state's 58 counties this week when they get promises instead of checks for $89 million in anticipated payments for welfare, food stamps and other services. The move will be a devastating blow to the counties, which must serve more and more people looking for government help as the economy craters and jobs disappear, said Paul McIntosh, executive director of the California Association of Counties.
The economic crisis has decreased our state's tax revenue and increased the strain on state services at a time when they are most needed. My district (CA Congressional District 32) has been hit even harder.
Cities like El Monte, Azusa, and Baldwin Park all currently have unemployment rates that are close to 12% (as of December 2008) — almost five points above the national average.
Currently, city officials in El Monte are discussing the possibility of closing down one of the city's fire stations to save money, which could nearly double emergency response times in some areas.
We need to ensure that working-class communities in East Los Angeles and the San Gabriel Valley are not left behind. But most importantly, we need leaders who understand financial issues and their real-life economic impact in order to provide solutions to this crisis.
Emanuel Pleitez
Candidate for U.S. Congress - District 32